Collectors of exotic and vintage cars typically hold well-reasoned opinions on most topics,
including the best way to finance their automotive acquisitions.

Few car collectors, however, actually take the time to compare the economic and tax advantages
of outright purchase, versus borrowing or leasing. Force of habit, pride of ownership
and misinformation can all cloud what should be a fact-based financial decision.

Because leasing is often the least understood and most maligned financing alternative,
we asked Mitch Katz of Premier Financial Services—long recognized within the industry
as an authority on exotic and vintage autos—to clear up some of the myths and
misunderstandings.

Q Why is leasing so misunderstood?

A Unfortunately, the leasing industry has done a poor job of
market education. People don’t understand that the leases we
arrange today are very different from when auto leasing was
first introduced. They only remember horror stories about
people being locked into a lease. Although leasing options
and flexibility have changed significantly, market perceptions
of leasing have not.

Q What are the shortcomings of “traditional” leasing?

A The traditional leasing structure is based on a rental
concept: the lessee pays an upfront fee and monthly fees for
a fixed period; mileage without penalty is limited; and the
vehicle is eventually returned. For obvious reasons, this
arrangement is unsuitable for most exotic and vintage car
collectors, and also does not meet the needs of people who
wish to change cars frequently.

Q How has leasing changed?

A Leasing is now far more customized, and user-friendly.
At Premier, for example, we provide a Simple Lease® program
designed specifically for car collectors, that enables them to
drive more car for their money, and to end their lease at any
time without the penalties normally associated with early
termination.

Q Explain how your Simple Lease® works.

A We simply agree on a lease-end residual value for the car,
and while the lease is in place the owner makes payments
based on the difference between the amount financed and
that residual. When the lease expires, the owner has four
options: 1. Pay the residual and own the car. 2. Sell the car,
pay the residual, and keep any difference. 3. Trade in the
car, let the dealer pay the residual, and keep any difference.
4. Refinance the residual through a new lease without a large
cash outlay, and continue to own the car.

Q What happens when an owner wants to end
a lease early or switch cars?

A That’s the beauty of our Simple Lease®. An owner who
wants to end a lease early pays the balance owed, which is
calculated based on simple interest. Owners can also switch
cars within their lease without penalty, simply by paying
any difference in value between the two cars. The lease’s
residual value and payments remain unchanged.

Q Are there tax benefits
associated with leasing?

A Sales tax on a purchased vehicle is due immediately. With
a lease, in most states, tax is based on the monthly payment
schedule. This provides the car owner with the use of that
money over the term of the lease. More significantly, if the car
is leased under a business name—not necessarily a corporate
for car collectors, according to
industry authority Mitch Katz.

Q Can collector cars be considered a business expense?

A Many of our leasing clients use their cars for legitimate business
purposes. A Ferrari 275GTB/4 certainly impresses prospects
and customers. Because automobiles play an important role in
our culture, a head-turning car can serve as the cornerstone of
a bona fide business promotion or advertising campaign.

Q Do the benefits of leasing only apply to collector cars?

A Most of the leases we arrange are for exotic, vintage, collector
and luxury cars, only because this is the marketplace we’ve
been involved in for more than 25 years. But we can provide
financing for any vehicle with a value of more than $25,000.

Q Are there any lease restrictions regarding where
a car is purchased?

A Our leasing customers purchase cars from anywhere in the
country; from a dealer, an individual, or even Ebay. Premier is
not in the business of buying, selling or trading cars. Our job
is to make it easy for people to own cars through leasing.

Q What’s the #1 myth regarding leasing?

A People are told that leasing is an elaborate, time-consuming
process. If this were true, Premier would be unable to boast
about its 95% customer retention track record.

Q Are collectors making a mistake if they don’t lease?

A We don’t think leasing makes sense for every situation.
But sophisticated car buyers are making a mistake if they
don’t consider all of their financing options. And leasing
is an extremely viable option.

Q What’s the best way to learn more about leasing?

A I’m happy to answer any question about leasing on a
no-obligation basis. My toll-free number is (877) 973-7700,
and my e-mail is mkatz@whynotlease.com.